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I don't think "evil" is an overstatement at all. At the cliff, the effective incremental tax rate is not only well over 100% but can be almost arbitrarily larg

I don't think "evil" is an overstatement at all. At the cliff, the effective incremental tax rate is not only well over 100% but can be almost arbitrarily large. [ETA:] And the real damage that has been done to people's lives, for decades now, is substantial. If welfare had been done right in the beginning, with no cliff, I'm not even sure it would be an issue now. It's certainly an experiment worth trying! > Even continuous functions can create high effective marginal taxes Agreed (as we're discussing in another subthread). So, what are you saying? The cliff is fine as it is? You have a better idea? What?

SilasX 8y ago
I agree that a continuous function is better than a stepwise function. I don't agree that it avoids the core problem with stuff-giving welfare problems, which is that they introduce high effective marginal taxes. I think those get trapped in death spirals the very same way unless you introduce orthogonal disincentive effects against gaming the system, like social pressures, work training requirements, benefit limits.
- ScottBurson 8y ago
  I think that as long as it's in their clear and immediate interest to make a little more money, most people are going to try to find a way to do that. I think poverty itself applies all the "stick" that's needed; as long as even part of a "carrot" is available, people will reach for it. (Sure, there will be exceptions, but that's not what we're talking about here; we're talking about most people.) I don't think people need "social pressures" to get them out of poverty — the idea is ridiculous and, frankly, offensive. [Edit: that was too strong, and I withdraw it. I'm not sure how effective it can be, though, for the government to try to apply social pressure, and I don't think it's most of what's needed, anyway.] What they need is a little more help. Case in point: In 2015, Montana implemented a bipartisan, state-funded employment initiative that offers Medicaid recipients a range of services, including career counseling, on-the-job training and tuition assistance. The program is voluntary — people can sign up when they enroll in Medicaid — and it’s paired with targeted outreach so that those who stand to benefit most from the program are aware of their options. So far, more than 22,000 Montanans have participated, and employment among nondisabled Medicaid recipients is up 9 percent in the state. [0] [0] https://www.nytimes.com/2018/07/07/opinion/sunday/do-poor-people-have-a-right-to-health-care.html https://www.nytimes.com/2018/07/07/opinion/sunday/do-poor-pe...
- scarejunba 8y ago
  What is the alternative this is being compared to? Universal welfare? If not, this may just be one of those unsolvable problems given the constraints.

SilasX 8y ago

I agree that a continuous function is better than a stepwise function. I don't agree that it avoids the core problem with stuff-giving welfare problems, which is that they introduce high effective marginal taxes. I think those get trapped in death spirals the very same way unless you introduce orthogonal disincentive effects against gaming the system, like social pressures, work training requirements, benefit limits.

ScottBurson 8y ago
I think that as long as it's in their clear and immediate interest to make a little more money, most people are going to try to find a way to do that. I think poverty itself applies all the "stick" that's needed; as long as even part of a "carrot" is available, people will reach for it. (Sure, there will be exceptions, but that's not what we're talking about here; we're talking about most people.) I don't think people need "social pressures" to get them out of poverty — the idea is ridiculous and, frankly, offensive. [Edit: that was too strong, and I withdraw it. I'm not sure how effective it can be, though, for the government to try to apply social pressure, and I don't think it's most of what's needed, anyway.] What they need is a little more help. Case in point: In 2015, Montana implemented a bipartisan, state-funded employment initiative that offers Medicaid recipients a range of services, including career counseling, on-the-job training and tuition assistance. The program is voluntary — people can sign up when they enroll in Medicaid — and it’s paired with targeted outreach so that those who stand to benefit most from the program are aware of their options. So far, more than 22,000 Montanans have participated, and employment among nondisabled Medicaid recipients is up 9 percent in the state. [0] [0] https://www.nytimes.com/2018/07/07/opinion/sunday/do-poor-people-have-a-right-to-health-care.html https://www.nytimes.com/2018/07/07/opinion/sunday/do-poor-pe...
scarejunba 8y ago
What is the alternative this is being compared to? Universal welfare? If not, this may just be one of those unsolvable problems given the constraints.